Class certification denied for black policyholders who were charged higher premiums by Jefferson-Pilot

In Thorn v. Jefferson-Pilot Insurance Co., the plaintiffs sought certification under Rule 23 of a class action on behalf of all African-Americans who were charged higher rates for life insurance than white customers over a period of seventy years by Jefferson-Pilot and its predecessor companies.

The District Court, by Judge Cameron Currie, denied certification, finding that "because it could not resolve Jefferson-Pilot’s statute of limitations defense on a class-wide basis, issues common to the class did not predominate over individual ones." The Fourth Circuit in an opinion by Judge Karen Williams, joined by District Judge James Dever from North Carolina with Judge Michael dissenting, affirmed the denial of class certification. The plaintiffs' claims were brought under 42 U.S.C. § 1981. The Court noted that the District Court found that several different statutes would apply for the different states. In addition, the Court noted that federal law would determine when the claims accrued, based on what the individuals knew or should have known, and "[e]xamination of whether a particular plaintiff possessed sufficient information such that he knew or should have known about his cause of action will generally require individual examination of testimony from each particular plaintiff to determine what he knew and when he knew it." The Court noted that the burden of proof falls on the plaintiffs to prove that the case meets the requirements of Rule 23, even thought the statute of limitations is an affirmative defense on which the defendant would have the ultimate burden of proof.

Addressing the claim that the members of the class more or less knew or should have known the same thing, the Court responded: "But short of the fact that the class members are all African-American and all purchased industrial life insurance policies from Jefferson-Pilot, the record reveals no information that would allow us to conclude that the class members — 1.4 million African-Americans of all ages and both sexes, who are spread out geographically over four states and temporally over 62 years — are so homogeneous that media reports and other information about dual-rate practices would affect them all in precisely the same manner. We refuse to make such broad generalizations about the class members based on nothing more than the color of their skin and inferences about their socio-economic status arising from the fact that they purchased an industrial life insurance policy from Jefferson-Pilot. To do so would be to engage in the very brand of stereotyping about which Appellants complain."